GBP/USD pierced through 1.66

Following a rebound from the 100-day SMA and 2011 highs at 1.65 GBP/USD has breached a number of tough resistances, including the 55-day SMA and monthly pivot point. Accordingly, a chance of further appreciation of the Sterling increased, also considering the technical signals on the weekly and monthly time-frames. However, there is strong resistance at 1.6722/12 represented by the weekly R1 and, more importantly, by the recently broken up-trend.

Continuous outperformance of the Pound relative to the greenback lately convinced many of the SWFX market participants that the former currency is overvalued and they short-sold it, bringing the percentage of bears from 57% up to 62% over the weekend.